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TMI Blog2025 (3) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... is which was later selected for post-clearance audit. In the Bill of Entry, the appellant declared the total value of the imported goods as USD 3050125 C&F including the value of accessories and declared its classification under Chapter subheading 89051000 of the Customs Tariff Act, 1985 i.e. under sub-heading "Dredger". During the course of audit, it is noticed that with the classification of dredger and additional accessories under the said Tariff heading, the appellant had availed BCD exemption in respect of the said goods and as per specification of the said dredger, additional length of cutter head ladder and jet pump system are not compulsorily required to be supplied with the equipments along with the standard model dredge. Also in the invoice, the importer has been charged separately for supply of the said accessories. Further, it is noticed that the imported accessories are not chargeable to the same rate of duty as that of the imported dredger need to be classified under the respective heading; the jet pump system is classifiable under Chapter subheading 84137097 and cutter head ladder is classifiable under Chapter subheading 84314990 as part of extracting machinery. Also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 1283.33 cms, hence it could not be transported in one lot; the description of the goods declared by the appellant were "dredge with components, 48 pieces" and the value USD 30, 50, 125.00(C&F), insurance of USD 2, 34, 704.00. The total assessable value of the goods declared by the appellant in Indian rupee is Rs.15, 88, 304/-. The goods were cleared on 10.04.2012 on self-assessment basis. Post-clearance audit raised several objections and pointed out on 18.01.2013 that there is a short-payment of duty of Rs.53, 08, 264/-. The appellant later filed refund application dated 08.02.2013 for refund of excess duty paid and also replied to the audit objections. 3.2. He has submitted that the issuance of show-cause notice as well as addendum is in violation of the principles of natural justice; hence it is invalid. It is further submitted that the copies of the documents received which cannot be relied upon to pass the adjudication order since they were not admissible evidence. Consequently, the show-cause notice and addendum cannot be considered as notices in the eyes of the law; hence, the order is required to be set aside. 3.3. Further, it is submitted that as held in a number of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues for determination are whether (i) the declared value of the imported dredger is correct; (ii) classification of the additional length of cutter head ladder and jet pump set is under CTH 89051000 or under respective heading and (iii) benefit of Notification No.01/2011-CE dated 01.03.2011 is admissible. 7. Undisputed facts of the case are that the appellant had filed Bill of Entry No.6483593 dated 09.04.2012 declaring the imported goods as "Dredge with components, 48 PCS" and declaring its classification under sub-heading 89051000 and total value as USD 3050125 C&F including the value of accessories. During the post-clearance audit of the transaction, the Department raised an objection to the special discount of 17.5% allowed from the declared value and also the classification of the additional length of ladder and jet pump set etc. Consequently a letter was addressed to the appellant mentioning the said deficiencies in the declaration and directed to pay differential duty of Rs.53, 08, 264/- by letter dated 08.02.2013. After receiving the response from the appellant, show-cause notice was issued to the appellant for recovery of the said differential duty along with interest and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not find any discrepancy in the said reasoning of learned Commissioner in issuing the addendum to the show-cause notice pending adjudication of the case on the basis of the fresh evidences brought on record. We find that the addendum to the show-cause notice was communicated to the appellant and appellant has submitted a detailed reply rebutting each and every allegation both in response to the initial show-cause notice as well as in the addendum to the show-cause notice. In these circumstances, there is no violation of principles of natural justice and the addendum is valid and issued within the frame of law laid down under various judgments referred by the learned Commissioner. 9. The next issue needs to be addressed is the redetermination of the assessable value as declared by the appellant in their Bill of Entry dated 09.04.2012. Initially, approach of the Department in not accepting the transaction value was on the ground that the special discount allowed by the overseas seller is not in accordance with the normal practice; hence liable for rejection. Later, in the addendum to the show-cause notice, based on the statements of Shri Jagadish Boloor, Managing Director and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declared by the appellant is liable to be rejected under Rule 12(2) of the Customs Valuation Rules, 2007. After rejecting the transaction value, the learned Commissioner resorting to Rule 9, proceeded to redetermine the assessable value observing as follows:- 19. The re-determination of value is to be as per the CVR. The explanation 1(i) given under sub-rule (2) of Rule 12 of CVR prescribes that where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by proceeding sequentially in accordance with rules 4 to 9. Hence, on going through the Rule 4 of CVR, I observe that the same pertains to determination of value by adopting the transaction value of identical goods. In the subject case, I observe that the goods are tailor made and hence, no identical goods are available. Neither the investigation nor the importer has produced any data on identical goods and therefore, the value cannot be re-determined under Rule 4 of CVR. Similar is the case with Rule 5 of CVRs also. As the value cannot be determined under Rule 4 and 5 of CVRs, I proceed to examine as to whether the value c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m cannot be issued or on the grounds that the value declared cannot be doubted in the case. These issues have been considered by me above and findings are drawn. Therefore, I hold that the best judgement method in this case would be evaluation of the goods imported based on the Chartered Engineer's report. 10. We find the reasoning recorded by the learned Commissioner is in consonance with the principles of Customs valuation and also the case laws referred therein and does not warrant interference. 11. On the issue of classification of additional length of cutter head ladder and jet pump system, the appellant claimed its classification under Chapter sub-heading 89051000, whereas the Revenue proposed its classification under 84314990 and 84137097 respectively. The learned Commissioner referring to the dictionary meaning of the 'parts' held that part means an element of a sub-assembly or assembly, not normally useful by itself and not amenable to further disassembly for maintenance purposes; also referring to various judgments on the scope of parts and accessories, he has observed that these are two different things and not the same. In this backdrop, analysing the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l parts of the dredger, learned Commissioner has held that because the dredger was dispatched in 48 pieces in CKD condition, it cannot be itself make all the parts as integral parts of the dredger. Analysing the observation of the learned Commissioner in arriving at the classification of the additional length of cutter head ladder under CTH 84314990 and jet pump system under CTH 84137097, we do not find any apparent error in the reasoning of the Commissioner; hence, the observation relating to classification of the said products are upheld. 12. On the issue of admissibility of Notification No.01/2011-CE dated 01/03/2011, which prescribes rate of Excise duty @ 1% to the appellant when they have not availed cenvat credit, following the Circular No.B-1/3/2011-TRU dated 25.03.2011, the learned Commissioner has held that the benefit of 1% Excise duty without cenvat credit facility cannot be extended to them. This issue is no more res integra and covered by the judgment of the Hon'ble Madras High Court in the case of CC(Exports), Chennai Vs. Prashray Overseas Pvt. Ltd. [2016(338) ELT 44 (Mad.)]. Their lordships observed as under:- 60. Hence, in fine, the propositions of law that would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011-CE dated 01.03.2011 to the appellant. 13. On the issue of penalty and confiscation, we find that the appellant had misdeclared the value and suppressed their relationship with the overseas seller, the initial survey report from the knowledge of the Department which has been candidly admitted by the Managing Director of the appellant company, resulting to short payment of duty of Rs.54, 67, 041/-. Hence, confirmation of demand under Section 28(4) of the Customs Act, 1962 is justified and upheld. Consequently, imposition of penalty under Section 114A on the appellant company and penalty on the Managing Director under Section 114AA is justified. However, in calculating the penalty amount under Section 114A of the Customs Act, 1962 against the appellant company, the learned Commissioner has added interest amount to the differential duty, which is erroneous in view of series of judgments of this Tribunal. Therefore, the penalty imposed be restricted only to the extent of differential duty confirmed. Since the imposition of penalty under Section 114AA on the Managing Director is upheld, further penalty under Section 112(a) of the Customs Act in the circumstances is not warranted and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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